Who is the patent owner?

US law presumes that a patent application is owned by the individual inventor(s) unless another person or entity is properly identified and substantiated as the patent owner. So the inventor is assumed the owner unless otherwise indicated.

Who is the patent applicant?

As far as patent applications are concerned, “applicant” basically means the owner. A patent applicant specifically refers to a person (which may also be a company – aka “juristic person”) who has the right to apply for the patent – in other words, the patent owner. Therefore, in the typical situation where an employee’s invention is owned by the employer, the employee would be identified as the inventor and the employer the applicant.

If there is no transfer to a company or another person, then the original inventor(s) will also be the applicant.

Who is the patent assignee?

If a company or organization owns the patent rights, then the simplest way to clear the record and let the public know is to file a patent assignment signed by the inventor. A patent assignment is a simple document where each inventor acknowledges that the patent application belongs to someone else. The executed assignment is recorded with the Assignments division of the USPTO. The “assignor’ refers to the one giving away the rights, and the “assignee” refers to the one receiving the rights.

Who owns the continuing applications?

An original patent application may often lead to continuing applications. To account for this possibility, a well drafted patent assignment should state that all continuing applications stemming from the original application will also belong to the assignee. This avoids the need to get inventors to sign a new assignment whenever a continuing application is filed.

Who is the patent owner if the inventor will not sign the assignment?

It’s not uncommon for inventors to leave a company and become unavailable, which is why it’s best to get inventors to sign the assignment as early as possible when they’re still around. If an applicant cannot get missing inventors to sign the assignment, the applicant should gather documentary evidence of its ownership. This documentation should be recorded with the USPTO prior to paying the issue fee:

If the applicant is the assignee or a person to whom the inventor is under an obligation to assign the invention, documentary evidence of ownership (e.g., assignment for an assignee, employment agreement for a person to whom the inventor is under an obligation to assign the invention) should be recorded as provided for in part 3 of this chapter no later than the date the issue fee is paid in the application.

37 CFR 1.46(b)(1)

The documentary evidence can take the form of an employment agreement stating that the inventor was under an obligation to assign the invention to the company.

Who is the patent owner when there is no employment agreement?

What if there is neither an executed assignment nor an employment agreement? MPEP Section 409.05 states that an applicant’s proprietary interest may be demonstrated by a legal memorandum showing how a court would award title of the invention to the applicant. So, if you can show that case law in your side, a legal brief to that effect may be filed that may be sufficient to show proprietary interest.

If employment agreement exists: employer vs. employee, university vs. student

Most companies in the business of innovating require employees to sign an employment agreement containing an assignment of inventions clause. Similarly, universities and academic institutions may require certain students to sign an assignment of inventions agreement. In both cases, such IP assignment agreements typically state that the employer owns the IP to anything developed by the employee within the scope of, or related to, the employee’s duties.

In California, Labor Code § 2870 states:

(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

1. Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or

2. Result from any work performed by the employee for the employer.

(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

CA Labor Code § 2870

How to Determine Whether Employer or School Might Own Your Invention

Assuming a signed employment agreement exists, a few initial questions should be considered upfront in trying to figure out who might own patent rights to your invention:

  • Was the invention developed by the employee entirely on his or her own time?
  • Was the invention developed by the employee without using the employer’s equipment, supplies, facilities or trade secret information?

If the answer is yes to both questions, then the invention could belong to the employee. However, a few additional questions must also be considered to see if any exceptions apply:

  • At the time of conception or reduction to practice of the invention, did the invention relate to the employer’s business or R&D?
  • Did the invention result from any work performed by the employee for the employer?

In answering these last two questions, timing is key. If an employee developed an invention after employment terminated with a prior employer, then the employer would not have any ownership rights to the invention. [see Applied Materials, Inc. v. Advanced Micro-Fabrication Equipment, Inc., 2007-5248 (N.D. Cal. May 20, 2009)]. Otherwise, such an over-reaching assignment clause would constitute a non-compete agreement which is unenforceable in California [see California Business and Professions Code § 16600].

Unless we’re dealing with protectable trade secrets, the principle here is that you can’t make ex-employees erase from their memory their knowledge and experience, and you can’t preclude them from earning a living using that know-how.

Who is the patent owner when there is no employment agreement?

What if there is neither an executed assignment nor an employment agreement? MPEP Section 409.05 states that an applicant’s proprietary interest may be demonstrated by a legal memorandum showing how a court would award title of the invention to the applicant. So, if you can show that case law in your side, a legal brief to that effect may be filed that may be sufficient to show proprietary interest.

If no employment agreement, was the employee hired to invent?

Even without an employment agreement specifying that IP belongs to the employer, an employee may have an obligation to assign patent rights to the employer if the employee was hired to invent. If the invention is the precise subject of their employment, then the employee may have an obligation to assign patent rights to the employee. The same result may apply if an employee was given a specific task of developing a device or process to which the invention relates.

What if an employee was not hired to invent or develop a specific device?

If an employee was not hired to invent or develop a specific device or process, ownership most likely will belong to the employee but the employer may have certain “shop rights.” The shop rights doctrine states that an employer may have an implied nonexclusive and nontransferable royalty-free license to use an employee’s invention if the employee uses company time and materials to create the invention.

The following two tabs change content below.

Vic Lin

Startup Patent Attorney | IP Lead Partner at Innovation Capital Law Group
We align ourselves with Davids fighting Goliaths. Our registered patent attorneys work as a team to equip startups and founders with solid IP rights that facilitate funding, growth and sales. Email or call us so we can get to work on your IP: (949) 223-9623 | vlin@icaplaw.com